MULN, FSR, LCID, FFIE stocks melt after dire warning by dealers

Electric vehicle stocks have come under intense pressure in the past few months and the trend could continue. Mullen Automotive (MULN) stock price plunged to a record low of $0.1581 on Wednesday, 99% below the highest point this year. This crash has brought its total market cap to just $66 million.

Fisker, Lucid, and FFIE are also tumbling

Mullen Automotive’s plunge is not alone. Fisker (FSR) stock price has crashed to a record low of $1.78. The company, which has a short interest of over 50%, has plunged by more than 80% from the highest point this year. 

Fisker shares have retreated after the company downgraded its delivery forecast for the year. It attributed this to logistic challenges since the company manufactures its vehicles in Europe, where it has a partnership with Magna. 

Lucid Group (LCID) stock price has also retreated to $4.36, down by over 75% from its highest point this year. Other top EV companies like Faraday Future (FFIE) and Rivian (RIVN) have also seen their shares plunge.

This performance is a clear sign that the electric vehicle (EV) industry is not doing well as growth slows. These fears were confirmed this week after a group of 3,882 dealerships sent a warning letter to President Biden.

In it, they warned that EVs were not selling as fast as expected despite the rising government mandates and incentives. They argued that demand for EVs jumped sharply in 2022 but has now fizzled out. The statement added:

“Last year, there was a lot of hope and hype about EVs. Early adopters formed an initial line and were ready to buy these vehicles as soon as we had them to sell. But that enthusiasm has stalled. Today, the supply of unsold BEVs is surging, as they are not selling nearly as fast as they are arriving at our dealerships.”

MULN vs FFIE vs FSR vs GOEV stocks

EVs are not selling in the US

EVs are facing huge challenges in the United States. For one, they are usually more expensive than gasoline vehicles, with the average price being about $50,000. In a period when inflation is rising, it has become tough for many customers to afford them.

Further, the charging infrastructure is not ready for this transition. The number of faulty charging stations in the US is rising. Also, at times, charging an EV can be more expensive than filling gas now that gas price has dropped to $3.20.

There are other challenges that are affecting the EV industry. Many people live in apartments in the US, and therefore lack the necessary home charging gear. Also, EVs usually lose charge faster in cold weather. 

Therefore, publicly available data shows that EVs are not selling. Dealers are typically staying with EVs for 102 days before finding a buyer. Internal Combustion Engine (ICE) vehicles are only staying for about 52 days.

All this explains why major automakers like General Motors and Ford have started scaling down their EV operations. Ford has paused work on its $3.5 billion battery plant in Michigan. 

And this week, General Motors announced a new plan to repurchase shares worth $10 billion. It is now focusing on its ICE vehicles as sales of its electric vehicles like Hummer fizzle.

All EV companies are being affected in this crisis. Tesla, the biggest EV company in the world, has been forced to slash prices in the US, Europe, and China. The goal is to maintain its market share and reach its annual production target.

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